How big does a bank need to be before it's considered too big to fail?
At the time of the financial system meltdown in the fall of 2008, some American banks were very big indeed. Bank of America's assets were equivalent to 16.4% of U.S. gross domestic product, with JPMorganchase and Citibank not far behind.
In this execuBook, authors Simon Johnson and James Kwak argue that those banks grew so large that their potential failure threatened the stability of the entire system, giving them a unique degree of leverage over the government. The financial system needs to be reformed and the megabanks broken up, to reduce their funding advantage and force them to compete on the basis of products, price and service rather than implicit government subsidies.
This summary is call for action to prevent another financial crisis of the kind that occurred in 2008. It will be of interest to anyone who is concerned about the economic future of the United States and the world.
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